MONTREAL — Facing corruption-related criminal charges and forced to surrender control of his billion-dollar construction empire, Antonio Accurso is a political leper these days.

But in testimony Friday, the disgraced businessman recalled a time when politicians of all stripes were eager to be in his presence and solicit his largesse, even if it meant circumventing election law.

The day after revealing a photo of a beaming Mr. Accurso hugging Quebec Premier Jean Charest, then in opposition, at a 2001 Liberal fundraising cocktail party, the Charbonneau commission explored Mr. Accurso’s generous political donations. A police search of provincial Liberal headquarters uncovered receipts — filed in a folder with the label “Tony A” — for donations from Mr. Accurso’s employees totalling more than $60,000.

And that was the tip of the iceberg. Between 1998 and 2009, Accurso employees and their families donated $556,080 to the Liberals, $154,185 to the Parti Québécois (PQ) and $37,825 to the Action démocratique du Québec (ADQ), the commissioners heard.

Mr. Accurso, 62, acknowledged in most cases he reimbursed the employees for the payments as part of a scheme to get around political donation limits. At the time the maximum donation was $3,000 and companies were prohibited from contributing.

“Nobody is going to give a $3,000 cheque out of conviction,” he said.

He added Liberal bagman Marc Bibeau, with whom he had business dealings, coordinated the donations, setting an annual target for Mr. Accurso.

Mr. Bibeau would tell him, “I would like it if you could find 25 or 30 thousand,” he testified. One of his employees would deliver a bundle of cheques to Mr. Bibeau’s office in an envelope with the Accurso company logo.

Mr. Accurso said his generosity was motivated by a desire to ensure politicians did not come between him and public contracts.

“It’s what my father taught me: Don’t ask a politician to help you; ask him not to harm you,” he said.

He said he jumped at the opportunity when Mr. Bibeau invited him to a private dinner with Mr. Charest, when the Liberal leader was still in opposition.

“I think it would interest a lot of people to dine with a future premier,” he said, adding the conversation focused on Mr. Accurso’s intimate knowledge of the Quebec Federation of Labour.

The now-defunct ADQ of Mario Dumont also solicited his support. He provided cheques and hosted a fundraising cocktail party at his Laval restaurantm as he had done in 2001 for the Liberals. He said the PQ sought funding from his companies in the 1990s when Jacques Parizeau was leader, but the subject was not explored Friday because it predates the commission’s mandate.

Data compiled by the commission show Mr. Accurso’s donations to all three provincial parties topped $100,000 in both 2007 and 2008, before drying up in 2009. That coincided with the first media reports he was using his political and trade-union ties to win contracts and investments.

“Nobody was asking us for money any more,” he said. “It was definitely because of the accusations, because my popularity had decreased a lot.”

In what sounded like a settling of scores with the man who played a major role in bringing about the Charbonneau commission, Mr. Accurso testified he wrote a cheque for nearly $250,000 to help Jacques Duchesneau pay off a debt incurred in his 1998 run for Montreal mayor.

Mr. Duchesneau, a former Montreal police chief, would go on to head a provincial anti-collusion task force and write a damning report that all but forced Mr. Charest to call a public inquiry.

Mr. Accurso testified Mr. Duchesneau assured him he would return the favour once he got back on his feet. But he has no copy of the cheque, he said, because the police seized all his records.

Mr. Duchesneau denied taking any money from Mr. Accurso.

“It’s false, totally false, and he knows it,” he told 98.5 FM radio.

Mr. Accurso is a bitter man. Toward the end of his testimony Friday, as the commission lawyer went down the list of guests he entertained on his luxury yacht the Touch, he lashed out.

“Other people, businessmen, are allowed to have friends, but I’m not allowed to have friends. I’m not allowed to invite them over,” he said.

“Is there someone one day who is going to leave me alone and treat me like a human being? It’s rough.”

MONTREAL — Quebec construction magnate Antonio Accurso used heavy machinery to build highways, bridges and tunnels over his decades in the business, but he also built a social network of about 3,500 people, he boasted this week before the Charbonneau commission.

And for that project, his preferred tool was a garishly decorated 37-metre yacht, the Touch, where union leaders, municipal officials and even rock star Mick Jagger enjoyed Capt. Accurso’s hospitality as he sailed the Caribbean.

Charbonneau Commission handoutFormer Montreal city manager Robert Abdallah and Antonio Accurso (R) on Accurso's yacht in late 2004 or early 2005.

In his third day on the stand at the inquiry into corruption in Quebec’s construction industry, Mr. Accurso said Thursday he came to the yachting life naturally. As a six-year-old he would pilot a dinghy with a six-horsepower motor to fish pickerel in the Lake of Two Mountains, west of Montreal, he explained.

By 2004 he was one of Quebec’s most powerful businessmen and launched the 1,600-horsepower Touch, featuring four bedrooms, a six-person Jacuzzi and “stylish European designs,” according to a 2005 article in ShowBoats International.

For a time, there was no shortage of friends eager to accept an invitation and Mr. Accurso routinely paid for their flights. It became a rite of passage for presidents of the powerful Quebec Federation of Labour and other senior QFL officials to embark on the Touch.

Former Montreal city manager Robert Abdallah and former Montreal executive chairman Frank Zampino were among the passengers, as was Richard Marcotte, former mayor of the Montreal suburb of Mascouche.

Messrs. Zampino and Marcotte are facing criminal charges after being arrested by Quebec’s anti-corruption squad, as is Mr. Accurso.

When reports surfaced in 2009 municipal and union officials were enjoying trips provided by one of the province’s biggest builders of public infrastructure projects, alarm bells went off. Mr. Zampino, who left politics in 2008, said he had “committed a blunder.”

A conversation recorded between Mr. Accurso and former QFL president Michel Arsenault in March 2009, played at the Charbonneau commission this year, showed the Touch quickly became an albatross.

“If the boat isn’t useful for PR any more, I’m going to get rid of it,” Mr. Accurso said. Mr. Arsenault joked he would save money. “You won’t need that boat any more. Nobody’s going to want to go on it.” (The Touch is now listed for sale for $5-million.)

fraseryachts.comThe deck of Antonio Accurso's 37-metre yacht, christened The Touch. The vessel has four bedrooms, a private dining room, an on-board hot tub.

In another wiretap recording from 2009, Jocelyn Dupuis, former director of the QFL construction wing and a Touch guest, is heard reacting to media coverage of the Accurso yacht.

“I think that boat is the boat of power in Quebec,” he said. “What happens in Quebec is decided on that boat.”

Thursday, Mr. Accurso minimized the boat’s role. Once it was used to entertain Air Algérie officials with a view to landing a construction contract in Algeria, he said. But no elected provincial or federal politicians ever travelled on it, he said, nor did any senior bureaucrats or political staffer.

Apart from the union and municipal officials the commission has heard about, the passenger list consisted of family, in-laws, school friends “and Mick Jagger, who came on a trip on the boat,” he said. “That’s about it.” He did not elaborate on how the Rolling Stones lead singer was invited.

fraseryachts.comA bedroom in Antonio Accurso's 37-metre yacht, christened The Touch. The vessel has four bedrooms, a private dining room, an on-board hot tub.

Commission lawyer Sonia LeBel tried without success to get Mr. Accurso to acknowledge he cultivated friendships with people who could be “useful” to his business interests.

At the end of the day, the testimony took a different turn as Mr. Accurso described how in September 2012, after he had been arrested on charges including fraud, conspiracy and breach of trust, his companies were informed they were no longer eligible to bid for Hydro-Québec projects. This time, he speculated, a relationship he failed to cultivate came back to haunt him.

He quickly learned the order had come from newly elected Parti Québécois premier Pauline Marois. “Maybe I didn’t donate enough money to the Parti Québécois,” he said.

That led Ms. LeBel to produce a photo of a beaming Mr. Accurso hugging an equally delighted Jean Charest, the Liberal premier defeated by Ms. Marois in 2012.

fraseryachts.comA bedroom in Antonio Accurso's 37-metre yacht, christened The Touch. The vessel has four bedrooms, a private dining room, an on-board hot tub.

The photo, dated 2001, when Mr. Charest was opposition leader, is signed by him with the inscription, “Dear Tony. Thanks for the support.”

Mr. Accurso said it was taken when he hosted a fund-raising cocktail for the Liberals at his Laval restaurant.

“I don’t think it’s a big secret that I am more Liberal than I am PQ,” he said.

MONTREAL — Antonio Accurso, the construction magnate at the centre of corruption and collusion allegations in Quebec, acknowledged Wednesday two members of the Rizzuto crime family were among the contacts he amassed over his decades in business.

Questioned at the Charbonneau commission into corruption in Quebec’s construction industry, Mr. Accurso identified Mafia boss Vito Rizzuto and his son Nick Rizzuto Jr. as having been “minor contacts” in his vast network.

“A minor contact is someone I can run into from time to time, someone I know his name,” he said.

Commission lawyer Sonia LeBel did not explore Mr. Accurso’s relationship with the Rizzutos, but previous witnesses have said Mr. Accurso did more than simply bump into Vito Rizzuto.

Investigator Eric Vecchio testified in March Mr. Accurso had a breakfast meeting with Mr. Rizzuto in 2003 to discuss the possible involvement of one of Mr. Accurso’s firms in a Montreal real-estate project.

Rival businessman Lino Zambito testified in 2012 he was surprised to find Mr. Rizzuto waiting after he had been convened to a meeting with Mr. Accurso to discuss a construction contract the two were interested in landing.

Postmedia filesVito Rizzuto

Mr. Zambito said Mr. Rizzuto acted as a mediator, advising Mr. Zambito the project might be too ambitious for his young company.

He said Mr. Rizzuto told him, “Try to find a solution with [Mr. Accurso], so that this time it’s him and the next time it will be you.”

Vito Rizzuto died last December of cancer after serving a U.S. prison term for his involvement in three 1981 murders, while Nick Jr. was shot dead in Montreal in 2009.

Mr. Accurso, who is facing criminal charges, including fraud, breach of trust and corruption, has always strenuously denied any association with the Rizzuto family. In 2010, he accused Radio-Canada of falsely reporting he had attended the visitation for the younger Rizzuto.

“Falsely linking Mr. Accurso to the family thought to control the Mafia in Montreal and affirming that he wanted to pay final respects to one of this family’s members cases serious damage to Mr. Accurso’s reputation,” his lawyer said in a statement at the time.

Wednesday, Ms. LeBel was more interested in establishing Mr. Accurso’s close ties to leaders of the Quebec Federation of Labour.

He described former QFL president Louis Laberge as “a spiritual father” and former head of the QFL construction branch Jean Lavallée as the brother he never had. Two other former QFL presidents were friends, he added.

But Mr. Accurso insisted he never got any favours from the union because of his personal ties to the leadership and he never meddled in internal union politics.

Commissioner Renaud Lachance challenged his claim his businesses never benefited from the connections he cultivated with union leaders. In 2010, when banks were refusing to lend Mr. Accurso money because his name had become linked to collusion schemes in Montreal, an electricians’ union headed by Mr. Lavallée agreed to lend one of Mr. Accurso’s firms $5-million.

“You don’t think that your excellent relationship with Mr Lavallée might explain why a union local loans money to a businessman who is in trouble?” Mr. Lachance asked. “Do you know a lot of union locals that lend money to businessmen?”

]]>http://news.nationalpost.com/news/canada/quebec-construction-magnate-admits-to-inquiry-that-rizzuto-crime-family-were-minor-contacts/feed3stdAntonio-AccursoPostmedia News filesSome witnesses have treated the Charbonneau commission as a confessional and have apologized. Antonio Accurso is not one of thosehttp://news.nationalpost.com/news/canada/some-witnesses-have-treated-the-charbonneau-commission-as-a-confessional-and-have-apologized-antonio-accurso-is-not-one-of-those
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MONTREAL – Early in his testimony before the Charbonneau commission Tuesday, apropos of nothing, Antonio Accurso reminisced about his glory days as a student athlete. “I was pretty good at football,” he told the inquiry into corruption in Quebec’s construction industry.

In fact, he went on, he was inducted into the sports hall of fame at the New York Military Academy where he attended high school and was named most valuable player while playing later at Montreal’s Loyola College.

It was indicative of the kind of day it would be, as the man who has been portrayed as the face of corruption and collusion in the province talked at length about his accomplishments — he was fluent in three languages as a child and began working for his father at age six — without acknowledging a single shortcoming.

The good-old-days theme would continue later, and this time it was more relevant to the commission’s mandate. Mr. Accurso, who sat atop the province’s most dominant construction empire until he was arrested on corruption charges in 2012, lamented that it has become hard for builders to make a buck in Quebec.

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“It’s tough today. It’s very tough,” he said. Because of “everything that happened” — in other words, the exposure of rampant bid rigging and corruption before the Charbonneau commission — people have become “timid.” Banks are reluctant to loan money to construction firms, and bureaucrats refuse to sign off on needed changes to projects if they require a cent of additional spending.

“The pendulum has swung completely to the other side,” he said, prompting Superior Court Justice France Charbonneau, who heads the inquiry, to offer a lesson in physics. “If the pendulum swung, as you said, completely to the other side, it is because [before] it was completely on the other side.” Mr. Accurso was not persuaded. “I do not agree,” he said.

Mr. Accurso began the day by seeking, through his lawyer, a publication ban on the testimony he is to deliver this week because of the criminal charges he faces. They include fraud, breach of trust and corruption. He had already gone to the Supreme Court of Canada, unsuccessfully seeking to quash the subpoena ordering him to testify.

Judge Charbonneau rejected Mr. Accurso’s request for a publication ban, concluding that sufficient safeguards are in place to ensure he will receive a fair trial when the first charges go before a jury, expected in early 2016. The inquiry has agreed not to question Mr. Accurso, 62, about events that led to him being charged.

THE CANADIAN PRESS/Graham HughesTony Accurso testifies before the Charbonneau Commission in Montreal, Tuesday, September 2, 2014 on an outside monitor.

During his two-and-a-half hours on the stand Tuesday, Mr. Accurso was questioned about the creation of his business empire and influential social network. His father, an immigrant from Italy, started a construction firm in Montreal after an initial venture delivering food to lumberjacks in northern Quebec, Mr. Accurso said. He worked there every summer as a child and then joined the company, Louisbourg Construction, full time upon graduating in engineering.

“I quickly realized that to succeed, we could not do like the others,” he said. The firm would target “complicated” projects like tunnels, subways and hydro dams, which most construction companies were “afraid” to tackle, he said. He took over the company following his father’s death in 1980.

A meeting around that time with Louis Laberge, president of the Quebec Federation of Labour, would lead to a lasting friendship and close ties with the powerful labour group. He acknowledged that he benefited from the support of the QFL’s investment arm, the Fonds de solidarité, but said the relationship was mutual, providing the Fonds with a $95-million gain on its investments.

He turned to the Fonds rather than seeking venture capital in Toronto because he shared Mr. Laberge’s vision of a “people’s bank” that would help Quebec businesses prosper, he said: “I was born here. I am proud to be a Quebecer. I am proud of Quebec.”

He is scheduled to be on the stand for the rest of the week, so there will be time for commission lawyer Sonia LeBel to inquire about some of the less proud moments of Quebec’s recent past. For example, the parade of union and municipal officials entertained on Mr. Accurso’s luxury yacht, the Touch; or the previous testimony by businessman Lino Zambito that mob boss Vito Rizzuto was brought in to mediate a business dispute between him and Mr. Accurso.

I quickly realized that to succeed, we could not do like the others

Mr. Accurso is expected to be the last marquee witness at the commission, which will conclude hearings this fall and is due to submit its final report to the government next April.

Some witnesses have used the inquiry as a sort of confessional, ending their testimony with apologies, but it is clear Mr. Accurso will not be one of those. He’s a hall-of-famer, after all, a proud Quebecer who allowed workers to make a decent living. How was he to know that the pendulum would swing and hit him like a wrecking ball?

MONTREAL — For a year, Arthur Porter has explored every avenue possible to avoid extradition from Panama to face corruption-related charges in Canada.

The former Montreal hospital executive and spy watchdog has invoked his status as special ambassador for his native Sierra Leone to claim diplomatic immunity, challenged the legality of Canada’s extradition treaty with Panama and complained to the United Nations and the Organization of American States about his treatment.

Now he says he is not being allowed to defend himself against the fraud allegations.

The former chief executive of the McGill University Health Centre (MUHC) and chairman of the federal Security Intelligence Review Committee (SIRC) took exception to testimony last week at Quebec’s Charbonneau commission, where a police investigator placed him at the centre of “the biggest corruption fraud in the history of Canada.”

Speaking with Jeff Todd, a former journalist who is helping him write his memoirs (titled The Man Behind the Bow Tie, he was highly critical.

“There is an ongoing legal procedure, which will eventually go through a process and reach a judgment,” he said. “This process will include evidence by both sides to enable the court to make a fair decision. These Commission proceedings are surely making a mockery of a future court process. One-sided evidence is being presented, damning statements are being made and no effort to test the validity of the so-called evidence and statements has occurred.”

The allegation he was part of the largest corruption fraud in Canada was “probably one of the most libelous statements I have ever heard,” he added. “I was not involved in any fraud.”

It was exactly a year ago Tuesday Dr. Porter and his wife Pamela were detained as they arrived in Panama from the Bahamas. Ms. Porter has been returned to Canada to face charges of conspiracy and laundering the proceeds of crime, while her husband fought extradition.

Dr. Porter, who faces charges including fraud, conspiracy and breach of trust, is alleged to have arranged a $22.5-million bribe in exchange for ensuring SNC-Lavalin Inc. won the $1.3-billion contract to build McGill’s new super-hospital.

Sûreté du Québec Sgt. Jean-Frédérick Gagnon told the Charbonneau commission SNC sent the money to a shell company in the Bahamas for the benefit of Dr. Porter, who split the alleged payout with his righthand man on the hospital project, Yanai Elbaz.

Former SNC chief executive Pierre Duhaime and vice-president Riadh Ben Aissa are also charged, with three others. Their preliminary inquiry is set for next March.

In his interview with Mr. Todd, Dr. Porter defended the lavish pay and benefits he enjoyed as MUHC chief executive, which included $304,000 in salary and bonuses in 2010, and the use of a Bentley luxury automobile.

“Various boards of directors approved the salaries and benefits that I negotiated. These terms were not uncommon for CEOs running billion-dollar-plus health-care institutions,” he said.

HandoutLa Joya prison in Panama, where Arthur Porter is being held.

Dr. Porter was forced to resign from SIRC after the National Post exposed his business dealings with notorious lobbyist Ari Ben Menashe in November 2011. He stepped down from the MUHC the following month.

Dr. Porter said in January 2013 he had terminal lung and liver cancer, but he is out-performing his doctors’ expectations, despite being detained in a squalid prison. Last June, Dr. Karol Sikora, told The Globe & Mail he would never stand trial because he had only six months to a year to live.

Now, he is vowing to see his reputation restored. “Many people are surprised that you have not fought back. Are you going to?” Mr. Todd asked him.

]]>http://news.nationalpost.com/news/canada/arthur-porter-who-is-fighting-extradition-to-canada-complains-he-cant-defend-against-fraud-allegations/feed3stdArthur-Porter-1HandoutSNC-Lavalin VP says he was given ‘no choice’ but to cheat on hospital proposalhttp://news.nationalpost.com/news/canada/snc-lavalin-vp-says-he-was-given-no-choice-but-to-cheat-on-hospital-proposal
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MONTREAL — Riadh Ben Aissa was not happy. It was November 2009, and the president of SNC-Lavalin Inc.’s construction division had just been told that his firm’s proposal to build McGill University’s new super-hospital — a year in the making — was seriously flawed.

The rooms planned for patients were too small, they were too spread out from nursing stations and the way the wards were laid out increased the risk of infection. “Your technical proposal raised fundamental problems of a clinical nature,” the government agency overseeing bidding on the project wrote to SNC.

Mr. Ben Aissa, however, had an ace up his sleeve, the Charbonneau commission of inquiry into corruption heard Thursday. Someone within the McGill University Health Centre had given him a copy of the rival consortium’s architectural drawings, detailing a ward design favoured by the MUHC clinicians.

Charles Chebl, who was working under Mr. Ben Aissa in 2009 and has since replaced him as vice-president and head of construction for SNC, testified that Mr. Ben Aissa told him to incorporate the OHL design into a hasty revision of SNC’s plan.

Mr. Chebl said he was “very uncomfortable” with the idea of using ideas taken from the competition, and he initially resisted including them in his response to the agency’s letter. “Then one day I am called to a meeting with [then SNC chief executive] Pierre Duhaime and Mr. Ben Aissa on the 21st floor. And there, I was lectured because I did not put the drawings in the response,” he said.

“I was ordered to put in a drawing right away and to include it in the letter of commitment. I had no choice.” His superiors “gave him hell,” he said.

It was one element of what commissioners have heard was an elaborate effort to stack the deck in SNC’s favour. A police anti-corruption investigator has detailed how Messrs. Ben Aissa and Duhaime allegedly arranged payments of $22.5-million to MUHC chief executive Arthur Porter and his right-hand-man Yanai Elbaz in exchange for ensuring SNC won the $1.3-billion contract. The four men are among eight people facing corruption-related charges in connection with the hospital project.

Mr. Chebl was given a rough ride by commission chairwoman France Charbonneau, a Superior Court justice, and commissioner Renaud Lachance. They had little time for his claim that he was simply following orders.

They noted that he met directly with MUHC officials during the bidding process, which in the interest of fairness was forbidden by Quebec’s public-private partnership agency. And when the first round of bids was inconclusive and a second round was held in early 2010, SNC fully incorporated the purloined OHL material into its new proposal.

Justice Charbonneau called SNC’s actions illegal, and Mr. Lachance said Mr. Chebl’s use of the drawings and his meetings with MUHC officials amounted to cheating.

“Doesn’t this raise a problem of the organizational culture at SNC-Lavalin?” Mr. Lachance asked. “Because everyone is cheating. They are aware they are cheating, including you.”

John Kenney/Postmedia News/FilesArthur Porter, left, with SNC Lavalin's Riadh Ben Aissa in June 2010 as construction started at the McGill University Health Centre super hospital in Montreal.

Mr. Chebl responded that the problem was certain individuals, not the company culture, and those responsible, including Mr. Duhaime and Mr. Ben Aissa, have left. Mr. Lachance noted that Mr. Chebl’s career had not suffered. “After you have regularly cheated in such an important contract, instead of punishing you, they give you a promotion,” he said. He speculated that Quebec’s Order of Engineers might conclude Mr. Chebl’s actions breached its code of ethics.

SNC was awarded the contract April 1, 2010 after Dr. Porter and Mr. Elbaz seized control of the selection process during the second round, the commission has heard. An internal MUHC evaluation of the two proposals written in October 2009 indicates SNC had a steep hill to climb to make its hospital acceptable.

“The design of the inpatient units for the Adult and Children’s hospitals is poor, raising concerns of functionality and patient safety,” the report said of the SNC proposal. It noted the “inadequate visibility of all patients” on the wards, the “poor organization of support spaces” and the “overall lack of flexibility” were so serious it would be it hard to recruit and retain nursing staff. “Fundamental re-design of this key component of the proposal is required.”

It was redesigned, with a little help from the competition. “You copied OHL,” Justice Charbonneau said, and Mr. Chebl agreed.

Mr. Chebl acknowledged that SNC desperately wanted the MUHC project because it was one of the biggest hospital projects in the world, and it was being built right in the Quebec company’s backyard.

“It was your feeling that SNC should have this contract because it was on your turf?” Justice Charbonneau asked. “Yes, Madame chairwoman,” Mr. Chebl replied, “but not at any price.” As the commission concluded its study of the MUHC project Thursday, it was clear that winning the contract had come at a steep cost to its reputation.

MONTREAL — Miguel Fraile had never met Riadh Ben Aissa before he was called to SNC-Lavalin Inc.’s Montreal headquarters in January 2010. The men were professional rivals, heading competing bids to build McGill University’s super-hospital, but Mr. Fraile of the Spanish firm OHL agreed to meet. He never dreamt the president of SNC’s construction division had invited him to a dressing down.

“He started by asking, who am I? Who is OHL? We are nothing. We are nobody. Montreal is SNC’s city, the [McGill University Health Centre] is its project,” Mr. Fraile recounted Wednesday as the Charbonneau commission into corruption continued its study of the $1.3-billion hospital project.

He said Mr. Ben Aissa told him OHL must withdraw from the bidding, which was set close in March. SNC is a “powerful company in Canada,” he was told, and if OHL dropped out, the two firms might be able to team up in the future.

“He said that if we won the contract, he would make our lives impossible.” Mr. Fraile said he rebuffed the threat, telling Mr. Ben Aissa, “If we win, we win.”

The menacing sense of entitlement reflected in Mr. Ben Aissa’s alleged tirade was also evident among senior executives at the MUHC, a senior hospital official told the commission.

In the fall of 2009, MUHC selection sub-committees were studying the two bids. Imma Franco, associate director for planning of programs and services at the MUHC, was on two key committees, including one examining the proposed hospital’s functionality — how it would actually deliver care. That committee, like almost all the others, had concluded the OHL proposal was superior.

Her boss, Yanai Elbaz, director of the redevelopment project and right-hand-man to MUHC chief executive Arthur Porter, paid her a visit. “He took care to remind me that I had to do what the boss wanted, and to remind me where my paycheque was coming from,” she said. “He was referring to the boss, who was Dr. Porter.” The message was that she should use her influence among committee members to sway them in favour of SNC. She refused, and soon afterwards asked to be transferred to another department where she would not work under Mr. Elbaz.

SNC ended up wining the contract, and police allege that $22.5-million in bribes paid by SNC to Dr. Porter and Mr. Elbaz helped secure the deal. The two men, along with Mr. Ben Aissa and former SNC chief executive Pierre Duhaime, are among eight people facing corruption charges in relation to the project.

Both Ms. Franco and Mr. Fraile said that at the time, they got the feeling something was not right, but they did not suspect corruption. Ms. Franco said she did not lodge any complaint when she saw her boss trying to influence the supposedly independent evaluation of the proposals.

“I didn’t know who else to turn to, when it was my boss and his superior who were pointing us in a certain direction,” she said. Instead she reiterated to committee members the importance of professionalism and the committee maintained its score in OHL’s favour. Faced with an evaluation against SNC, Dr. Porter used a minor change in the composition of the OHL consortium as a reason to disqualify its bid.

John Kenney/Postmedia News/FilesArthur Porter, left, with SNC Lavalin's Riadh Ben Aissa in June 2010 as construction started at the McGill University Health Centre super hospital in Montreal.

On Dec. 3, 2009, Dr. Porter recommended to the board that it accept the SNC bid. When Ms. Franco learned the news after the meeting, she was dismayed because the entire evaluation process had gone out the window. “A lot of effort had been put into these evaluations. People did it very professionally, very meticulously, and they were not taken into consideration in the end,” she said.

Dr. Porter, who is now fighting extradition to Canada from a Panama jail cell, left the MUHC in December 2011, a month after the National Post exposed his business dealings with notorious lobbyist Ari Ben Menashe.

When OHL heard through the grapevine that SNC was celebrating its victory in December 2009, its lawyers sent a letter to the provincial government agency overseeing the project claiming there had been a “flagrant violation” of the bidding procedure.

The government insisted on a second round of bids with a deadline in March 2010. At this point, Ms. Franco, testified, Dr. Porter and Mr. Elbaz, “took over” the selection process. She was not asked to sit on any of the selection sub-committees.

“They pretty much controlled it,” she said. “Without having to say anything, it was clear that they did not want me to take part in the second phase.”

On April 1, 2010, SNC was formally announced as the winner, even though its bid was $60-million higher than OHL’s.

MONTREAL — What a police investigator described Tuesday as “the biggest corruption fraud in the history of Canada” was allegedly being carried out under his nose, but Normand Bergeron did not suspect a thing.

The former president of the provincial agency overseeing public-private partnerships in Quebec, Mr. Bergeron, like so many in Quebec, had been wowed by the larger-than-life persona of the man behind the McGill University superhospital project, Dr. Arthur Porter.

“We had someone before us who was president of the Security Intelligence Review Committee, who was an eminent oncologist, who we were told was the best manager of hospitals in Quebec,” Mr. Bergeron testified Tuesday before the Charbonneau commission of inquiry into corruption. What Quebec needed was more Arthur Porters, Mr. Bergeron, a longtime senior civil servant, was told when he arrived at the PPP agency in the summer of 2009.

“Nobody that I know of was questioning the integrity of Dr. Porter,” he said.

It’s a much different story today, as Dr. Porter fights extradition from a Panama jail cell to face corruption charges related to the hospital project. He was forced to resign from SIRC, the federal spy review board, after the National Postexposed his business dealings with notorious lobbyist Ari Ben Menashe in November 2011. He stepped down as chief executive officer of the McGill University Health Centre (MUHC) the following month.

Sgt. Jean-Frédérick Gagnon of the Sûreté du Québec testified that Dr. Porter personally received $11.25-million in payments from SNC-Lavalin Inc., paid to a shell company in the Bahamas. Dr. Porter’s right-hand man at the MUHC, Yanai Elbaz, received the same amount through a second shell company, Sgt. Gagnon said, making for a total kickback of $22.5-million in exchange for ensuring SNC won the contract.

While the payments went unnoticed by government officials, they raised red flags at SNC. A contract signed in December 2009 between SNC-Lavalin International Inc. and Sierra Asset Management, Dr. Porter’s shell company, called for $30-million in payments, purportedly in connection with an Algerian gas project. Sgt. Gagnon said Ron Denom, an SNC executive, was told to sign the contract by Pierre Duhaime, then CEO of SNC, and Riadh Ben Aissa, then president of SNC’s construction division.

A copy of the contract kept by Mr. Denom contained his handwritten note that the contract was signed “under instructions from P. Duhaime and R. Ben Aissa — strict secrecy — ‘just sign – no questions asked.’ ” Sgt. Gagnon said that on a second version of the contract, modified to change the dates of the payments, Mr. Denom’s signature was forged.

It was not until early 2012, when concerned employees advised SNC’s board of directors of the payments to Sierra Asset Management, that an internal company probe was launched, resulting in a police investigation. The investigation has led to charges against eight people, including Messrs. Duhaime, Ben Aissa, Porter and Elbaz.

Charbonneau Commission via The GazetteWhat Quebec needed was more Arthur Porters, Normand Bergeron, a longtime senior civil servant, was told when he arrived at the PPP agency in the summer of 2009. “Nobody that I know of was questioning the integrity of Dr. Porter,” he said.

Mr. Bergeron acknowledged that in hindsight, warning signs were there. As the deadline came to choose a winner between the two consortiums bidding for the lucrative hospital contract, Dr. Porter pulled out all stops in favour of the project led by SNC-Lavalin. Mr. Bergeron described how Dr. Porter and Senator David Angus, then chairman of the McGill University Health Centre’s board of directors, short-circuited a selection process after both bids came in above the ceiling set by the government in November 2009. The two men withdrew mid-meeting for private discussions then returned to announce that the selection process was suspended. “I’d never seen anything like that before with a selection committee,” Mr. Bergeron said.

Dr. Porter insisted on excluding the rival to SNC, a consortium led by the Spanish company OHL, on the grounds that one of its members had changed. He pressed the provincial Liberal cabinet ministers responsible for the project to choose SNC, and Senator Angus called then-premier Jean Charest in December 2009 seeking a decision in SNC’s favour, Mr. Bergeron testified.

“Mr. Charest called me to ask what he should say to Senator Angus, who would not stop harassing him during the Christmas holidays,” Mr. Bergeron testified. He said he advised the premier to tell Mr. Angus that cabinet would be making its decision in January.

The government ultimately resisted the pressure and chose to re-launch the selection process, increasing the budget from $1-billion to $1.34-billion. SNC was chosen in March 2010, even though its bid was $60-million higher than OHL’s. Sgt. Gagnon testified that one of the major weaknesses of the original SNC bid was the “functionality” of its proposed hospital wards. He said Mr. Elbaz gave an SNC official a copy of the rival consortium’s drawings, and the SNC consortium used them to improve its proposal.

Nobody in government had an inkling that the process had allegedly been corrupted, Mr. Bergeron said. In fact they patted themselves on the back for bringing down the cost from the roughly $1.8-billion originally bid by the two consortiums. “Really, we thought we had done a bloody good job for the taxpayers,” Mr. Bergeron said.

MONTREAL — McGill University Health Centre executive director Arthur T. Porter soaked up accolades after informing his board of directors in 2009 that all was in order to announce the winning bidder to build a new super-hospital. The board chairman, Senator David Angus, “praised A.T. Porter’s visionary thinking and his perseverance,” according to minutes of a Dec. 3, 2009 board meeting made public Thursday by the Charbonneau commission into corruption.

But in fact, the commission heard from its investigator, Mr. Porter had been performing more like a bully than a visionary, throwing his weight around like “a little tough in the schoolyard” to ensure a consortium led by SNC-Lavalin Inc. won the lucrative contract even though a rival consortium’s bid scored higher.

André Noël’s testimony offered the first glimpse of how Mr. Porter, who with seven others has been charged in a conspiracy to defraud taxpayers of $22.5-million in connection with the hospital project, is alleged to have rigged the bidding.

The investigator said Mr. Porter used the pretext of a substitution of one member of the rival consortium — a building maintenance firm — to disqualify it from the bidding at the last minute. This came after evaluations performed by a number of MUHC selection sub-committees in the fall of 2009 had ranked the rival, led by the Spanish company OHL, above SNC on most counts.

Mr. Porter was prepared to mislead the government and his board in an effort to have the SNC bid selected, Mr. Noël testified. In a Dec. 2, 2009 meeting with the provincial health minister and treasury board president, Mr. Porter and Mr. Angus explained that the OHL consortium had been disqualified. They were told to get a signed release from OHL to avoid a possible lawsuit.

The next day, an MUHC official, St. Clair Armitage, met with the head of the OHL bid to inform him of the disqualification and try to sweeten the compensation pot. Mr. Armitage said the MUHC foundation, which raises money to support research and patient care, would contribute $2.5-million on top of the $7.5-million compensation provided for in the bidding documents. Mr. Noël said there is no evidence the foundation had agreed to the payment and speculated that the money would have come from another source.

In any event, OHL refused to withdraw, but that did not stop Mr. Porter from recommending that the board approve the SNC bid. Mr. Armitage delivered the good news to an SNC official in person, giving the man a bear hug, Mr. Noël testified.

But on Dec. 4, the OHL consortium sent a lawyer’s letter to the provincial agency responsible for public-private partnerships such as the MUHC project. It noted that the MUHC was in discussions with the SNC consortium about the project, a “flagrant violation” of the contract-tendering rules.

John Kenney/Postmedia NewsArthur Porter at the construction site of the McGill University Health Centre super hospital in 2010.

After telling the MUHC board that a government announcement of the winning bidder would be made on Dec. 7, Mr. Porter’s bluff was called when the government insisted on a signed release from the losing consortium. On Dec. 8, Messrs. Porter and Angus wrote to the health minister and treasury board president, saying the delay endangered plans to improve health care for Montrealers, but the government remained firm. Instead, the health minister ordered a new submission process with a March 2010 deadline, and an increased maximum bid of $1.3-billion, up from $1.1-billion. (Both consortiums had come in above the limit at about $1.8-billion in the first round.)

Mr. Noël said that for the second round of submissions, the MUHC selection committees were changed to place SNC supporters in key positions and get rid of those who favoured the OHL project. He said the SNC consortium was even able to use technical drawings from the rival consortium in its revised proposal, which former MUHC executive Yanai Elbaz slipped them.

Mr. Elbaz is among the eight charged in the corruption case, as are Mr. Armitage — a Brit who left the MUHC in 2010 and is wanted under an Interpol warrant — and former SNC chief executive Pierre Duhaime. Mr. Noël testified that Mr. Armitage and Mr. Duhaime were next-door neighbours and friends.

The province announced on April 1, 2010 that the SNC consortium had won the contract to build the hospital. “Our consortium is thrilled to have earned the privilege to develop the MUHC’s Glen Campus,” Mr. Duhaime was quoted saying at the time.

Mr. Noël maintained that SNC won because it had a lot of help from friends in high places at the MUHC. “They managed to manipulate this process in a skillful way,” he said of Messrs. Porter, Elbaz and Armitage. “Sometimes it was subtle, sometimes it was less so.”

MONTREAL — The Mafia usually didn’t invest their own money in construction or real-estate deals, but they still walked away with a profit when the projects were finished, Quebec’s corruption inquiry heard Wednesday.

The Charbonneau Commission is tackling the reach and role of the Mob in major real-estate deals and the influential role played by late Mafia boss Vito Rizzuto in some of those projects.

An inquiry investigator testified about organized-crime tactics when it came to the construction industry — a low-risk investment that reaped plenty of reward.

Eric Vecchio said Rizzuto and other mobsters were usually never front-line players with a direct financial stake. Instead, they stayed on the periphery, acting as consultants and deal-brokers while they picked up a piece of the profits.

“Organized crime take a profit from the construction industry,” Vecchio said. “In the end, they don’t really get involved, they don’t invest any of their own money, but they take away a consultant’s or arbiter’s fee.”

[youtube=http://www.youtube.com/watch?v=wBIdZyKnrSI&w=640&h=390]

The probe heard the voice of Rizzuto, the Mafia don who passed away last December. The recordings had elements of business dealings, and more personal elements as well. In one of the calls, a more personal moment was captured from Rizzuto when he admitted he was prone to getting the hiccups. “I always get them, if I drink too fast,” he said.

The recordings were gathered by police about 10 years ago during their massive Colisee investigation into the Mob.

The conversations centre on Rizzuto’s attempts to salvage a prestigious Old Montreal luxury condo project on de la Commune Street when developer Tony Magi risked not being able to finish it because of financial problems.

Beginning in 2002, some of Magi’s partners urged Rizzuto to get involved. The Mafia boss saw an opportunity to make money in the role of arbiter, with many of the conversations focusing on negotiating between partners, finding financing and ensuring the project is completed.

Later wiretaps showed that Rizzuto was involved in several other projects, making calls to Magi even while he sat in jail in 2004.

Vecchio said the transactions were not an attempt to launder money, as might have been in the past.

“They were usually using other people’s money, but money that was already laundered,” Vecchio said. “We’re no longer in an era of bags of money, basements filled with cash. The situation has evolved.”

The initial calls were captured in 2002 and 2003, but in later calls, Nick Rizzuto Jr., Vito’s late son, can be heard talking to Magi as he takes on a bigger role in his father’s absence.

Magi and Nick Rizzuto Jr. were business partners and contrary to his father, the younger Rizzuto took on an active role in the business.

Rizzuto Jr. was gunned down in December 2009 near Magi’s office in west-end Montreal. No one was ever arrested in his slaying.

Vecchio called the elder Rizzuto a “man of compromise” who was more interested in mediating and playing referee than relying only on violence.

The investigator said Rizzuto’s ability to keep everyone happy explains his long reign in local organized crime. He had a reputation for being able to bring together different criminal groups — bikers, street gangs and the Mob — under one roof.

MONTREAL — The Competition Bureau of Canada seized evidence from several Montreal-area construction firms Tuesday as part of a probe into allegations of bid-rigging and collusion in various public contracts.

The bureau said it is looking into allegations of an anti-competitive agreement among construction firms, but a spokesperson stressed the investigation is in its infancy.

“Today, what we’re doing is gathering evidence and this will be analyzed,” Gabrielle Tasse, the Competition Bureau spokesperson, said in a phone interview. “But there is no conclusion of wrongdoing at this time and no charges have been laid.”

There are reports that more than a dozen firms are being raided, but Tasse says she can’t say how many are being targeted.

Tasse said the contracts in question involve the building of public parks and squares and the repair of sidewalks, pipes, streets and sewers.

Bid-rigging and inflated contracts in the construction industry have been the subject of previous testimony at Quebec’s corruption inquiry.

The bureau has previously said it has been keeping tabs on testimony at the Charbonneau Commission and would not hesitate to investigate when necessary.

Tasse said this probe is being headed by the federal watchdog alone.

The bureau is an independent federal body that investigates suspected anti-competitive practices. It is responsible for applying the Competition Act, which sets out potentially hefty fines and prison sentences.

Investigations by the bureau are often lengthy, mainly because price-fixing and bid-rigging can be difficult to prove.

Gauthier said municipal councillors in Havre St-Pierre even called him once to quell a protest on a construction site.

Gauthier testified that local workers were mad because they wanted to work on the federal site.

He says he calmed them down by showing them they did not have the proper skills for the job.

Gauthier said the Quebec Federation of Labour’s construction wing tried to talk to him about his involvement in wildcat strikes and his strict adherence to collective agreements.

The inquiry has heard that these methods drove up the cost of construction on the Quebec North Shore by as much as 30%.

But Gauthier said his discussions with the union never went any further and that his real bosses were the workers in the region. In fact, the labour federation even paid for his fines when he was cited for bullying and harassment.

The union organizer argued his methods were necessary to defend the rights of workers in a far-flung region where the collective agreement was fiercely defended because it was so hard to find jobs.

MONTREAL — Premier Pauline Marois came out swinging on behalf of her husband Tuesday as opposition parties targeted his dealings with the province’s most powerful labour union.

Marois criticized Coalition Leader Francois Legault for calling on her husband, Claude Blanchet, to testify at a legislature committee.

After being silent on the issue in recent days, Marois spoke out on Tuesday, without any prompting from reporters, and dismissed Legault’s call as a desperate political move.

“I’m inviting Mr. Legault to calm down,” she said. “Mr. Legault is launching personal attacks and I don’t think it’s acceptable behaviour for someone who wants to be premier of Quebec and I believe it undermines his credibility.”

The controversy erupted after a 2009 wiretap, played recently at the Charbonneau Commission, suggested the then-president of the Quebec Federation of Labour was ready to enlist the aid of the Parti Quebecois to help thwart a corruption probe.

In the recording, now ex-president Michel Arsenault is overheard saying the union has a “deal with Blanchet.”

Blanchet had business dealings with the labour federation’s Solidarity Fund through a company he owned.

The fund invested just under $3 million with Blanchet’s company, BLF Capital. At the time, the company owned a couple of buildings valued at $5 million. The investment lost money over the next few years. Blanchet is no longer involved in the organization.

Arsenault was overheard saying the idea was to use Blanchet to persuade Marois to come out against the idea of holding any corruption inquiry.

Arsenault testified such a conversation never happened and Marois has said the PQ was never asked to stop an inquiry from happening.

Jacques Boissinot/The Canadian Press/FilesCoalition for Quebec’s Future leader Francois Legault has warned Pauline Marois not to call a snap election.

Blanchet was the founding president of the fund in 1983. He held the job until 1997.

Blanchet has not spoken publicly about the deal but Marois reiterated Tuesday there was nothing illegal about the deal.

Legault said Blanchet should be made to answer questions about the so-called deal before any future election.

A flurry of financing announcements by the government this week has fuelled speculation Marois will soon call a provincial election.

If Marois calls an early election campaign, “Every day I am going to talk about that deal, PQ-Blanchet,” Legault said, Montreal’s Gazette reports.

Marois invited Legault to look at the Charbonneau Commission’s own evidence and documents on her husband. The PQ’s lawyer spent more than an hour asking Arsenault questions about the Blanchet deal just last week.

Liberal Leader Philippe Couillard, meanwhile, rejected the idea of having Blanchet appear before a legislature committee.

“While the Charbonneau Commission is sitting, it’s not the role of the national assembly to transform into a parallel Charbonneau Commission,” Couillard said in Montreal.

“There’s one commissioner and she’ll decide who she wants to hear from.”

Arsenault, the former head of Quebec’s largest labour federation, denied that he was obligated to return favours to Accurso following the trip.

After the media learned of the trip in 2009, Arsenault said he never went on holiday with Accurso again.

He defended the practice of holidaying on Accurso’s dime, saying that is how business was done in the past. He acknowledged that things have changed today.

However, he said it wasn’t just union leaders who were seen with Accurso. “Politicians had dinner with him too,” Arsenault said.

Arsenault also defended Accurso as a businessman, saying his company, Simard-Beaudry, is a reputable firm that has done Quebec proud. “He treats his employees well and doesn’t use the black market,” Arsenault said.

The FTQ Solidarity Fund was keen to invest in projects with Quebec businessmen because it didn’t want outsiders (from the rest of Canada) running the construction firms, Arsenault said. When his father worked in Murdochville, none of the seniors bosses were francophone, he said.

The inquiry has already heard him in wiretaps speaking with a senior reputed figure in the Mafia, Raynald Desjardins, who is now imprisoned for murder.

In other recordings, Mr. Dupuis appeared to be rigging the election where his successor was chosen. In one recording he was overheard saying: “I’m the one who controlled that vote.”

But he scoffed Thursday at the suggestion that union elections were rigged, insisting that the labour movement was truly “democratic.”

A former crane operator who ran the construction wing for 11 years, he was pushed out over a controversy involving his expense claims in 2008.

He was subsequently employed by a decontamination firm the inquiry has heard was run by the reputed Mafioso, Desjardins.

Mr. Dupuis is not expected to be a co-operative witness. From the outset of his testimony, he said he disagreed with the calling of the inquiry.

A series of photos showed Mr. Dupuis’ close ties to Tony Accurso, a once-powerful figure in the province’s construction industry who now faces multiple criminal charges. Mr. Dupuis acknowledged he took part in as many as 150 events with him.

“Mr. Accurso was one of the biggest business owners in the construction industry, so it was in our interest to establish ties with him,” said Mr. Dupuis, who described Mr. Accurso as a friend.

Mr. Accurso was one of the biggest business owners in the construction industry, so it was in our interest to establish ties with him

“The work of a [union] president, of a director, is not to work 8 to 5 — it’s really a job that’s seven days a week… Our job is to make sure our workers get work and get referred to different companies.”

The inquiry saw photos of Mr. Dupuis celebrating with Mr. Accurso during his birthday and other occasions. Among those also seen in the photographs was Henri Masse, the longtime FTQ leader.

Mr. Dupuis faces a trial on fraud charges stemming from his allegedly inflated expense claims. The Crown has claimed that he manufactured tens of thousands in phoney invoices, which netted him $125,000.

According to a former union member who recently testified, Mr. Dupuis was also close to Normand (Casper) Ouimet, an alleged Hells Angels member who is accused of different crimes including involvement in 22 murders.

Mr. Dupuis has not been questioned about any of his organized-crime ties yet. He will have three days to prepare for those questions, as the hearings rose for the weekend.

MONTREAL — Dozens of suspects accused of corruption at Quebec’s municipal and provincial levels have also been involved in national politics, giving more than $2 million in donations to federal parties, an investigation by The Canadian Press has revealed.

An analysis by The Canadian Press involving all 102 individuals charged after sweeps by Quebec’s anti-corruption police squad shows that nearly half — 45 of them — made registered legal contributions to federal parties from 1993 to 2011.
The actual extent of their connections to federal politics, however, may never be known.

An ongoing public inquiry in Quebec has heard explosive allegations about illegal political financing, bid-rigging, collusion and Mafia ties in the province’s construction industry, but it does not have a mandate to explore whether such activities have occurred in the federal realm.

At the inquiry, industry players have described using political donations to gain influence at the provincial level and help unlock public funding for projects that had frequently been rigged at the municipal level.
Which begs the question: Has this occurred elsewhere in Canadian politics?

There have been only glancing and peripheral references to federal politics at the inquiry, which resumed this week after a summer break.

But Elections Canada’s records do offer information on many of the 102 individuals charged following investigations by the province’s anti-corruption squad — a list of people that includes industry executives, engineers, city officials, municipal politicians and lawyers.

The Canadian Press examined their donation history as well as the federal contributions of all 13 companies charged by the same Quebec corruption-fighting unit, which was created in February 2011.

Records show that more than three-quarters of those companies — or 10 firms — gave federal political donations between 1993 and 2006. Corporate donations in Canadian politics were restricted in 2003 and banned entirely in 2006.

The analysis also counted donations to federal parties made by construction and engineering companies where some of the 102 individuals held powerful positions, such as owner or senior executive. The Elections Canada online database only goes as far back as 1993.

Altogether, the contributions from the individuals and the companies, which were amassed over two decades in more than 900 donations, totalled nearly $2.2 million.

A decade ago, Liberal cabinet minister Sheila Copps argued in favour of an outright ban on corporate political donations, saying it was necessary to keep companies from influencing government policy decisions.

Copps, who was Jean Chretien’s heritage minister at the time, said corporate pressure hindered the government’s efforts to implement key policies of the Kyoto environmental accord.

She suggested in an interview that construction industry players also curry favour with politicians in pursuit of their corporate interests.

“Engineering firms attach to political parties because they want infrastructure contracts — it’s not rocket science,” said Copps, who noted that the allegations heard at the Quebec inquiry aren’t restricted to that province.

“If you went in and did a Charbonneau (commission) in any part of the country, you’d probably find people that have had vacations … and been greased by somebody for a contract.”

THE CANADIAN PRESS/The Charbonneau CommissionBags of money worth $720,000 are shown in this handout photo Thursday, June 13, 2013 in Montreal. Dozens of corruption suspects at Quebec's municipal and provincial levels have also been engaged in national politics, with more than $2 million in donations to federal parties, an investigation by The Canadian Press has revealed.

She said there’s nothing wrong with getting involved in politics, and promoting your cause. But she added that there should be sufficient, ongoing public oversight to ensure people aren’t taking illegal cuts of publicly funded contracts or receiving extravagant, under-the-table gifts.

When Copps was in cabinet, the Chretien Liberals placed limits on corporate donations in 2003. They were banned altogether by the Harper Tories in 2006, while individual donations were also capped at $1,100 annually.

The Canadian Press analysis revealed a precipitous plunge in donations in three stages: contributions from those now charged fell after the 2003 reform; fell again after the 2006 reform; and stayed low until they disappeared almost entirely after 2009, when the corruption scandals erupted in Quebec.

The Liberals, who held power from 1993 until 2006, received the most donations. Varying smaller amounts went to the old Progressive Conservatives, the Bloc Quebecois, the post-2003 Conservative party and its precursor parties, the Canadian Reform Conservative Alliance and the Reform party.

Connections between Quebec scandals and the federal domain have been officially off-limits at the public inquiry, but they have still come up since proceedings began last year, usually in brief instances.

This week, a witness testified about an alleged collusion scheme in the Quebec City area where eight big construction companies conspired to drive up prices while Ottawa went on a historic multibillion-dollar infrastructure spending blitz after 2007.

Another allegation came from the lips of the then-vice-president of Dessau Inc., one of the largest engineering-construction firms in Canada.

Rosaire Sauriol explained during testimony how he used fake-billing schemes to pump $2 million from the company into the coffers of provincial and municipal parties.

During his March appearance at the inquiry, Sauriol was asked whether he used the same strategy to channel money to federal parties and he replied: “Yes.”

Such illegal donations would not have appeared in the Elections Canada database pored through by The Canadian Press.

No further details about federal contributions emerged from Sauriol’s testimony.

Records from Elections Canada show he personally gave two donations to the Bloc for a total of $304. Between 1993 and 2006, his family’s company, Dessau, and its subsidiaries contributed a total of $246,368 to federal parties, primarily to the Liberals, and to a lesser extent the Progressive Conservatives and the Bloc.

There have been other examples of the probe sniffing along the periphery of Quebec provincial politics.
While questioning witnesses, Charbonneau commission lawyers have twice raised the name of Conservative Sen. Leo Housakos.

He has not been accused of any wrongdoing and they did not explain why they were asking about him.

A commission lawyer suddenly started questioning the head of the BPR engineering company about Housakos’ previous work at the firm and his appointment to the Senate.

Sources have told The Canadian Press that the senator helped organize a lucrative 2009 Conservative fundraiser — featuring a speech by Prime Minister Stephen Harper — that was attended by numerous engineering-industry employees.

Housakos admitted to soliciting a donation from his former BPR boss at the time, but he said he did not have any formal role in the Montreal event. The federal ethics officer, meanwhile, cleared Housakos in 2009 of any conflict of interest related to his time at BPR.

Housakos has since expressed frustration at what he describes as a smear-by-association campaign and a “witch-hunt” atmosphere around the inquiry.

Housakos has also threatened to sue different media, including The Canadian Press, over their news reports about the inquiry testimony.

The list of construction-industry players at that fundraiser included Sauriol and former SNC-Lavalin boss Pierre Duhaime, who is now facing fraud charges.

Federal agencies, meanwhile, are watching the inquiry from the sidelines.

The Competition Bureau of Canada says it has met with Charbonneau Commission officials to explain its mandate, which includes investigations into bid-rigging.

The bureau has also been involved in raids and seizures by Quebec’s anti-corruption police unit, known by the acronym UPAC, which was created by the Charest Liberals.

“Going forward, the bureau will co-operate with the Charbonneau Commission as requested in the limits of the law,” spokesman Phil Norris said in an email.

A spokeswoman for Election Canada would not say whether it was looking into any allegations that have emerged at the inquiry, noting that it never confirms or denies whether complaints have been received and investigations are underway.

She did say the agency is following the inquiry’s deliberations.

The elections watchdog, meanwhile, announced last week that it laid seven charges against the official agent for defeated Liberal candidate Jean-Claude Gobe in the Laval, Que., riding of Alfred-Pellan in the 2006 election.

Among the charges, Elections Canada alleges that the official agent, Jacques Chouinard, failed to open a separate bank account in a Canadian financial institution solely for Gobe’s campaign.

Gobe is now running for mayor of Laval in the November municipal election, seeking to replace two recent predecessors who successively resigned in scandal.

The Charbonneau inquiry has heard how construction-industry players used political donations and other gifts to win favour with provincial politicians in hope of unlocking public contracts.

Gilles Cloutier, a retired engineering executive and political organizer, testified that the industry systematically bankrolled municipal election bids illegally; then, once its allies took office, companies cashed in on rigged infrastructure contracts.

He said he then used political donations to make connections at the provincial level, and would lobby his contacts at that level of government to fund municipal projects he’d lined up.

Cloutier described how he used events with celebrities, including Montreal Canadiens legend Jean Beliveau, to bring together his municipal allies and influential provincial contacts.

Some of Cloutier’s testimony has been disputed by people he implicated.

He said the vast majority of money collected by political parties in Quebec is illegal. He estimated that less than 10% of funds collected at the municipal level, and 20% at the provincial level, actually came from legal eligible donors.

In Quebec, Cloutier said it was easy to find people willing to pose as donors because not only were they reimbursed, they received a tax break.

“The director general of elections didn’t check and it was easy to find strawmen because of the tax credit,” he told the inquiry in April. “Everyone called me because it was essentially a $300 gift.”

Cloutier mentioned during his testimony that he worked on federal election campaigns. Commission lawyers did not probe him for details about his role in national politics.

MONTREAL — The federal government’s historic multibillion-dollar infrastructure program has been lucrative for a few Quebec construction companies involved in illegal collusion, a witness testified at the province’s corruption inquiry on Tuesday.

That testimony produced a rare mention of the federal government at the probe — where politics outside Quebec has been declared off-limits and beyond the mandate of an inquiry that has severely rattled governments within the province.

The potential implications of the testimony were clear: that Canadian taxpayers, from coast to coast, may have seen some of their money gobbled up in collusion schemes.

The claim came on the first day of the inquiry’s return from its summer break, during an appearance on the witness stand by an engineering executive.

Patrice Mathieu, a former vice-president for Eastern Quebec at Aecom Technology Corp., said collusion in the Quebec City area began when companies there worked out a system in 2004 to rig a bid for work on retention basins at the St-Charles River.

They hit a snag when the Quebec City municipal government cancelled the bid, suspecting collusion, and started a new process — but the companies colluded again. They agreed not to lower their prices and to keep the same rates for engineers.

And the Quebec City system was born.

“It took a long time to install (the system) — but we got there,” said Mathieu, who had worked for Quebec-based Tecsult which was bought by the U.S. giant Aecom in 2008.

The inquiry has already heard of other, more longstanding schemes, some dating back decades, in Montreal and elsewhere in the province. The testimony has also destroyed several careers — including that of Montreal’s ex-mayor Gerald Tremblay.

But one thing the inquiry hasn’t done is drag in the federal government and its multibillion-dollar infrastructure spending blitz of the last decade.

Until Tuesday, that is.

Mathieu said the companies involved in the collusion system really saw their profits take off after 2006 — as the federal government embarked on one infrastructure refurbishment plan, and then another as part of the post-2008-meltdown Economic Action Plan.

The feds have dedicated $53 billion since 2007 to the Building Canada Plan, billed as the most expensive infrastructure program in Canadian history. Quebec City saw its own infrastructure spending suddenly jump from $70 million to $150-160 million, Mathieu said.

“The manna, the abundance of projects, was there,” Mathieu said.

Graham Hughes/The potential implications of testimony at the Quebec corruption inquiry on Sept. 13 were clear: that Canadian taxpayers, from coast to coast, may have seen some of their money gobbled up in collusion schemes.

He made the claim in end-of-day testimony. He did not explicitly state whether collusion was practiced on the contracts that received federal funding, nor did he state that collusion resulted in driving up the price tag.

He will be back on the witness stand Wednesday.

The federal government, for its part, may have created the ongoing fund but it is not actually responsible for handing out the contracts or picking the companies that win them.

Over the last two years, when asked about the Quebec scandals, the Harper government has taken great care to distance itself by repeatedly pointing out that its role was that of project-funder — not of project-manager.

“The projects that our government funds are priorities established by the provincial government,” Michele-Jamali Paquette, a spokeswoman for the minister of infrastructure, said in an email. “The province of Quebec is responsible for overseeing the tendering process and awarding contracts on these projects.”

Meanwhile, Quebec has been rocked by testimony of illegal activity by political parties at the provincial and municipal level, by construction companies, municipal bureaucrats, and their links to the Mafia.

Only a fraction of the testimony has touched on provincial politics, so far, with most of the witnesses to date stemming from the Montreal-area municipal realm. Federal politics, meanwhile, has been declared entirely off-limits under the rules of the probe.

The closest the inquiry has come so far to scorching federal politicians has been in brief and peripheral references — such as when engineering executive Rosaire Sauriol replied, “Yes,” when asked whether he performed the same illegal fundraising activities for federal parties as he had provincially.

The fall session of the probe will put labour unions under the microscope.

Charbonneau Commission/The Canadian PressJudge France Charbonneau asks a question to a witness at the Charbonneau Commission in Montreal, on Sept. 3, 2013.

Commission counsel Sonia LeBel said Tuesday, as she opened the autumn session, that unions hold “a key position in the industry.”

She said she wants to examine the possible infiltration of unions, links to organized crime, ties between businesses and unions, and intimidation and extortion on construction sites.

LeBel said the commission will delve deeper into the construction industry’s vulnerability to criminal infiltration.

The commission, which has focused heavily on municipal politics around Montreal, will spend more time examining other parts of the province.

The first witness of the session that began Tuesday was from the regional head of an engineering firm for the Outaouais region, near Ottawa and the Ontario border. Commission lawyers said the scams there differed from those described in Montreal and Laval.

Marc-Andre Gélinas, director-general for the Outaouais region for Aecom, said four companies split up the contracts for sewer, sidewalk and aqueduct work.

He said politicians and civil servants there weren’t aware of the collusion — which is different from earlier testimony about Montreal and its surrounding municipalities.

The former Tecsult employee said the purchase by an American company caused him problems. When Aecom stepped in, it created a code of conduct with a slew of new rules.

Under the new rules, he said, he couldn’t even buy civil servants lunch.

“It was the first code of ethics I’d ever seen in a company, which said clearly what were the acceptable behaviours, what weren’t, and the consequences and implications,” he said.

“I was shaken up and a bit uncomfortable when I learned about that code.”

The collusion continued anyway, he said.

He said he didn’t know whether such collusion existed across the river in Ontario — because another company office was responsible for Ottawa.

So far the Quebec probe has heard from 80 witnesses, including mayors, city bureaucrats, and engineering executives.

During the fall session, the commission is also expected to delve into construction contracts involving Quebec’s transportation ministry.

Chair France Charbonneau has been given extra time to complete her work. The corruption inquiry got an 18-month extension from the provincial government.

The inquiry will be required to submit a progress report by Jan. 31, 2014. Charbonneau must deliver her final report by April 2015.

Those are just some of the companies that belonged to Accurso, who ran a massive construction empire.

The charges stem from the period between June 1, 2005 and March 31, 2010. A spokesman for Revenue Quebec says the charges announced today are under the penal, not criminal, system and the maximum punishment is two years’ imprisonment.

The 928 charges announced today are almost all against Accurso and his former companies. In addition, Accurso and his right-hand man, Frank Minicucci, are accused of filing false returns for the same period.

A large part of Accurso’s construction empire was sold to a consortium earlier this year.

Meanwhile, Accurso has been charged in a number of municipal corruption schemes and is facing a wide range of charges stemming from those cases.

His name has also come up several times at Quebec’s corruption inquiry.

One witness, Lino Zambito, says that when he tried to bid against Accurso for a big job he was called to a meeting in the presence of Vito Rizzuto _ reputedly the most powerful mobster in Canada.

MONTREAL — The hunt for an untainted Montreal mayor resumed Tuesday as Michael Applebaum resigned one day after being arrested on 14 corruption-related charges.

In a brief statement in the main foyer of City Hall, Mr. Applebaum maintained his innocence and vowed to fight the charges but said it was in the city’s best interest for him to step down.

“Being mayor of Montreal is not a task that one can do while defending themselves against accusations of this nature,” he said. “I hope you will understand that I’m putting all my energy into my defence and into my family.”

The resignation came a day shy of the seven-month anniversary of his swearing-in as interim mayor. He was chosen by his fellow councillors to replace Gérald Tremblay, who had resigned after testimony at Quebec’s public inquiry into corruption linked him to illegal political fundraising.

Mr. Applebaum’s successor, who will serve until an election in November, is to be chosen next week from among the sitting city councillors.

Louise Harel, leader of the municipal party Vision Montréal, said it is crucial that the next mayor be above suspicion, which is no small task.

She said councillors from boroughs that have been raided by anti-corruption police “in the recent past” should not be considered for the job. That would rule out six of the city’s 19 boroughs, which were raided in February.

Her party’s proposed candidate, Laurent Blanchard, currently chairman of the city executive committee, stressed his clean background while speaking to reporters after Mr. Applebaum’s resignation. “There are no skeletons in my closet,” he said, noting that he has been married to the same woman for 25 years and drives an old car.

Mr. Applebaum had also billed himself as a man of integrity who would restore Montrealers’ battered pride following revelations that corruption, collusion and organized crime influence were rife in city affairs. When he took office on Nov. 19, he swore he would “erase this stain from our city, which I assure you is not indelible.”

At 6 a.m. Monday, officers with Quebec’s anti-corruption squad arrested him at his Montreal home and took him to provincial police headquarters, where he was advised he was facing criminal charges including municipal corruption, breach of trust, fraud toward government and conspiracy.

Justin Tang/Postmedia NewsFrançois Croteau, of Projet Montréal, announces his interest in being mayor of Montreal.

The charges relate to two real-estate developments in his west-end borough — a condo project and a sports complex. A former city councillor, Saulie Zadjel, and a former bureaucrat, Jean-Yves Bisson, were also charged. Police said the charges involved tens of thousands of dollars in bribes between 2006 and 2011.

Jockeying to fill the vacant mayor’s chair began as soon as the resignation was announced. Projet Montréal leader Richard Bergeron said his party is the only one that can be trusted to bring an end to the “horror story” the city has experienced. “Integrity, honesty without fault, is the first trademark of Projet Montréal,” he said. His party is proposing the current borough mayor of Rosemont, François Croteau, for the mayor’s job.

Other possible contenders include two former members of Mr. Tremblay’s executive committee, Alan DeSousa and Helen Fotopulos, but both represent boroughs that were raided by police. City council Speaker Harout Chitilian, a first-term councillor elected under Mr. Tremblay’s Union Montreal banner, has been mentioned as a non-partisan choice.

“What happened [Monday] gives a clear signal to anyone in municipal affairs anywhere in Quebec that, if they believe that they can have a career with skeletons in their closets, they are wrong and that there are people working very hard to find these past problems, and they will be found,” he said.

Mr. Applebaum, 50, said he could not comment on the “different accusations and the different rumours” but promised to fight the charges. “I have never taken a penny from anybody,” he said.

He said that during his short time in office he helped get Montreal back on track by forging a coalition administration. “I am very confident for the future of Montreal, a city that I love,” he concluded, declining to take questions and exiting up a stairwell behind him.

The Tories faced tough questions about former candidate Saulie Zajdel in the House of Commons on Monday, as opposition parties demanded to know how the man now facing criminal charges ended up working in the heritage minister’s office.

“The whole Conservative network has been smeared by the arrest of one of their star candidates,” NDP leader Thomas Mulcair said in question period.

“We know that Saulie Zajdel was a star Conservative candidate. We know he got a patronage job from that minister just days after his defeat … What we don’t know is what was Zajdel doing on the minister of heritage’s payroll. Tell us.”

In reply, Heritage Minister James Moore said if Zajdel is found to have broken the law, he should “have the book thrown” at him and “be accountable to the full extent of the law.”

Zajdel was slapped with five charges from acts allegedly committed back in his days as a municipal councillor — including breach of trust, fraud and corruption. Montreal Mayor Michael Applebaum also faces 14 charges.

A little over a year ago, Zajdel joined Stephen Harper for a happy-hour pub stop in Montreal as the Conservatives’ best hope to win their first seat in the city in a quarter-century.

]]>http://news.nationalpost.com/news/canada/harper-government-denounces-corruption-following-arrest-of-former-conservative-staffer/feed0stdSaulie Zajdel (L) and Maxime Bernier (R) during a rally on Wednesday April 13, 2011.